Puerto Rico has been having trouble financially, which is why they passed a debt reconstruction program after the death of Justice Antonin Scalia. The late Scalia was opposing for the lift of the upcoming U.S Supreme Court case.
Today, however, United States federal court gave permission last December for Puerto Rico to bid for a 2014 law which is the Recovery Act, says Reuters. This would give them the chance to resurface from their debt after much opposition from the late judge.
The government of the U.S. territory that has $70 billion borrowings, wished that the act alone would restore the structure of debt and can pull it out from the crisis, Reuters added. If so, then the island would have the power to compel policies on creditors in such a procedure. Nevertheless, bondholders argued that by doing so, it would worsen recovery for creditors.
Daniel Hanson estimated the chances of Puerto Rico's victory from 5% up until 30% since Scalia's death, which sparked a battle over the Senate. He said that Scalia himself was fair but very strong in his beliefs when it comes to contractual rights when he was still alive. For that news though, they are still arguing over who is going to replace Scalia's seat.
Moreover, a Supreme Court victory over Puerto Rico would help save them by earning bankruptcy protection, which the United States have already received. It was reported that it was stunted by the lack of support from Republicans. If chances are given, it would apply to some of the country's public corporations, such as PREPA, but it excludes debt issued by the island and the Government development bank.
Given the circumstances with the late judge's death, it would give the voting to seven justices for Purerto Rico, as Justice Samuel Alito, who is a conservative, has investment funds in the place. If the vote would tie in 4-4 then it would favor the appeal made by the lower court. The justice can take off the investments before the oral argument, according to Reuters. There are four viewed as liberals while the other three are liberal. According to David Skeel, a University professor, the four liberals have the possibility to be sympathetic over Puerto Rico. Yet, experts are still leaning over how simple it is to tell that Scalia is against the ruling as this involves legal questions.
Certain people in the industry and politicians commented over the case, such as Carlos Del Valle Cruz, who is the president of Puerto Rico's Senate, said that the death of Scalia favors the country. However, oral arguments are schedules in the Supreme Court this coming March 22.
